Economy of Libya

The economy of Libya depends primarily on revenues from the petroleum sector, which represents over 95% of export earnings and 60% of GDP.[13] These oil revenues and a small population have given Libya one of the highest nominal per capita GDP in Africa.[14][13]

Economy of Libya
Libya's economy relies heavily on oil. The ENI Oil Bouri DP4 in the Bouri Field is the biggest platform in the Mediterranean sea.
CurrencyLibyan dinar (LYD, ل.د)
calendar year
Trade organisations
OPEC, COMESA, CEN-SAD, AMU
Country group
Statistics
Population 6,678,567 (2018)[3]
GDP
  • $40.951 billion (nominal, 2018 est.)[4]
  • $74.719 billion (PPP, 2018 est.)[4]
GDP rank
GDP growth
  • 26.7% (2017) 7.9% (2018e)
  • 5.5% (2019f) −58.7% (2020f)[5]
GDP per capita
  • $6,288 (nominal, 2018 est.)[4]
  • $11,473 (PPP, 2018 est.)[4]
GDP per capita rank
GDP by sector
  • agriculture 1.3%
  • industry 63.8%
  • services 34.9%
  • (2017 est.)[6]
9.293% (2018)[4]
Population below poverty line
  • NA%
  • about one-third of Libyans live at or below the national poverty line[7]
N/A
0.708 high (2018)[8] (108th)
Labour force
  • 2,553,671 (2019)[9]
  • 38.7% employment rate (2012)[10]
Labour force by occupation
  • agriculture: 17%
  • industry: 23%
  • services: 59%
  • (2004)[7]
Unemployment30% (2004 est.)[7]
Main industries
petroleum, steel, iron, food processing, textiles, cement
186th (below average, 2020)[11]
External
Exports $18.38 billion (2017 est.)[7]
Export goods
crude oil, refined petroleum products, natural gas, chemicals
Main export partners
Imports$11.36 billion (2017 est.)[7]
Import goods
machinery, transport equipment, semi-finished goods, food, consumer products
Main import partners
FDI stock
  • $20.21 billion (31 December 2017 est.)[7]
  • Abroad: $20.97 billion (31 December 2017 est.)[7]
$2.574 billion (2017 est.)[7]
$3.02 billion (31 December 2017 est.)[7]
Public finances
4.7% of GDP (2017 est.)[7]
−25.1% (of GDP) (2017 est.)[7]
Revenues15.78 billion (2017 est.)[7]
Expenses23.46 billion (2017 est.)[7]
Economic aidrecipient ODA $9 million (2010), $642 million (2011), $87 million (2012)[12]
Foreign reserves
 $74.71 billion (31 December 2017 est.)[7]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

After 2000, Libya recorded favourable growth rates with an estimated 10.6% growth of GDP in 2010. This development was interrupted by the Libyan Civil War, which resulted in contraction of the economy by 62.1% in 2011. After the war the economy rebounded by 104.5% in 2012, but then crashed again following the Second Libyan Civil War.[15] As of 2017, Libya's per capita PPP GDP stands at 60% of its pre-wars level.[15]

Macro-economy trend

Libya had seen a fantastic growth rate, however, these proved unsustainable in the face of global oil recession and international sanctions. Consequently, the GDP per capita shrank by 40% in the 1980s. Successful diversification and integration into the international community helped current GDP per capita to cut further deterioration to just 3.2% in the 1990s.

Libyan GDP per capita was about $40 in the early 1920s and it rose to $1,018 by 1967. In 1947 alone, per capita GDP rose by 42 percent.

The following table shows the main economic indicators in 1980–2017. Inflation below 5% is in green.[16]

Year GDP
(in Bil. US$ PPP)		 GDP per capita
(in US$ PPP)		 GDP growth
(real)		 Inflation rate
(in Percent)		 Budget balance
(in % of GDP)
1980 83.3 27,894 0.6% 14.4% n/a
1981 72.8 23,313 −20.0% 13.2% n/a
1982 78.6 25,003 1.5% 13.8% n/a
1983 77.8 22,816 −4.7% 10.5% n/a
1984 73.8 20,766 −8.3% 12.4% n/a
1985 76.6 21,679 0.6% 9.1% n/a
1986 69.4 18,872 −11.4% 3.4% n/a
1987 60.7 15,831 −14.7% 4.4% n/a
1988 67.6 15,624 7.6% 3.1% n/a
1989 75.3 16,644 7.2% 4.5% n/a
1990 80.9 19,001 3.7% 0.7% 4.8%
1991 96.7 22,186 15.7% 11.7% 9.9%
1992 96.3 21,581 −2.7% 9.5% 1.3%
1993 94.8 20,797 −3.8% 7.5% −4.8%
1994 98.7 21,231 1.9% 10.7% −1.7%
1995 88.3 18,588 −12.4% 8.3% 4.9%
1996 92.3 19,064 2.6% 4.0% 12.6%
1997 93.3 18,959 −0.6% 3.6% −1.3%
1998 93.9 18,749 −0.4% 3.7% −1.6%
1999 95.8 18,824 0.5% 2.6% 6.6%
2000 101.6 19,614 3.7% −2.9% 14.1%
2001 102.1 19,408 −1.8% −8.8% 0.4%
2002 102.7 19,224 −0.9% −9.9% 7.2%
2003 118.3 21,833 13.0% −2.1% 6.4%
2004 127.0 23,051 4.5% 1.3% 11.7%
2005 146.7 26,236 11.9% 2.7% 31.4%
2006 161.0 28,294 6.5% 1.5% 31.8%
2007 175.8 30,411 6.4% 6.2% 28.6%
2008 184.0 31,293 2.7% 10.4% 32.5%
2009 179.9 30,178 −3.0% 2.4% −6.5%
2010 187.8 31,094 3.2% 2.5% 12.5%
2011 63.9 10,792 −66.7% 15.9% −17.2%
2012 146.3 23,282 124.7% 6.1% 28.6%
2013 93.9 14,987 −36.8% 2.6% −5.1%
2014 44.9 7,175 −53.0% 2.4% −73.8%
2015 39.5 6,246 −13.0% 9.8% −131.0%
2016 37.0 5,801 −7.4% 25.9% −113.3%
2017 64.4 9,986 70.8% 28.0% −43.2%

Notes:
1. For purchasing power parity comparisons, the US Dollar is exchanged at 0.77 Libyan Dinars only.

Mean wages were $9.51 per man-hour in 2009 (amounts to a compensation of $1598 for 21 working days of 8 hours).

Oil sector
See also: Energy in Libya

Libya is an OPEC member and holds the largest proven oil reserves in Africa (followed by Nigeria and Algeria), 41.5 Gbbl (6.60×109 m3) as of January 2007, up from 39.1 Gbbl (6.22×109 m3) in 2006. About 80% of Libya's proven oil reserves are located in the Sirte Basin, which is responsible for 90% of the country's oil output.[17] The state-owned National Oil Corporation (NOC) dominates Libya's oil industry, along with smaller subsidiaries, which combined account for around 50% of the country's oil output. Among NOC's subsidiaries, the largest oil producer is the Waha Oil Company (WOC), followed by the Agoco, Zueitina Oil Company (ZOC), and Sirte Oil Company (SOC). Oil resources, which account for approximately 95% of export earnings, 75% of government receipts, and over 50% of GDP. Oil revenues constitute the principal foreign exchange source. Reflecting the heritage of the command economy, three-quarters of employment is in the public sector, and private investment remains small at around 2% of GDP.[18]

A map of world oil reserves according to U.S. EIA, 2017

Falling world oil prices in the early 1980s and economic sanctions caused a serious decline in economic activity, eventually leading to a slow private sector rehabilitation. At 2.6% per year on average, real GDP growth was modest and volatile during the 1990s. Libya's GDP grew in 2001 due to high oil prices, the end of a long cyclical drought, and increased foreign direct investment following the suspension of UN sanctions in 1999. Real GDP growth has been boosted by high oil revenues, reaching 4.6% in 2004 and 3.5% in 2005. Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange constrain growth.

Although UN sanctions were suspended in 1999, foreign investment in the Libyan gas and oil sectors were severely curtailed due to the U.S. Iran and Libya Sanctions Act (ILSA), which capped the amount foreign companies can invest in Libya yearly at $20 million (lowered from $40 million in 2001). As of May 2006, the U.S. has removed Libya from its list of states that sponsor terrorism and has normalised ties and removed sanctions. This clears the road for U.S. oil companies to exploit Libyan oil and is expected to have a positive impact on the Libyan economy.

The NOC hopes to raise oil production from 1.80 million bpd in 2006 to 2 million bpd by 2008. FDI into the oil sector is likely, which is attractive due to its low cost of oil recovery, high oil quality, and proximity to European markets.[19] Most Libyan oil is sold on a term basis, including to the country's Oilinvest marketing network in Europe; to companies like Agip, OMV, Repsol YPF, Tupras, CEPSA, and Total; and small volumes to Asian and South African companies.[20]

StatisticAmount
Proven Oil Reserves (2007E)41.5 Gbbl (6.60×10^9 m3)
Oil Production (2006E)1.8 million barrels per day (290×10^3 m3/d) (95% crude)
Oil Consumption (2006E)284,000 barrels per day (45,200 m3/d)
Net Oil Exports (2006E)1.5 million barrels per day (240×10^3 m3/d)
Crude Oil Distillation Capacity (2006E)378 kbbl/d (60.1×10^3 m3/d)
Proven Natural Gas Reserves (2007E)52.7×10^12 cu ft (1.49×1012 m3)
Natural Gas Production (2006E)3,999×10^9 cu ft (1.132×1011 m3)
Natural Gas consumption (2005E)206×10^9 cu ft (5.8×109 m3)

Notes:
1. Energy Information Administration (2007)

Field Development and Exploration
Further information: Oil reserves in Libya
Oil is Libya's major resource.

In November 2005, Repsol YPF discovered a significant oil deposit of light, sweet crude in the Murzuq Basin. Industry experts believe the discovery to be one of the biggest made in Libya for several years. Repsol YPF is joined by a consortium of partners including OMV, Total and Norsk Hydro. Also located in Murzuq Basin is Eni's Elephant field. In October 1997, a consortium led by British company Lasmo, along with Eni and a group of five South Korean companies, announced that it had discovered large recoverable crude reserves about 800 kilometres (500 mi) south of Tripoli.[21] Lasmo estimated field production would cost around $1 per barrel. Elephant began production in February 2004.

WOC's Waha fields currently produce around 350,000 bbl/d (56,000 m3/d). In 2005, ConocoPhillips and co-venturers reached an agreement with NOC to return to its operations in Libya and extend the Waha concession 25 years. ConocoPhillips operates the Waha fields with a 16.33% share in the project. NOC has the largest share of the Waha concession, and additional partners include Marathon and Amerada Hess.[22]

Refining and Downstream

Libya has five domestic refineries:

RefineryCapacityOperator
Zawia Refinery120,000ZOC
Ras Lanuf Refinery220,000Ras Lanuf
El-Brega Refinery10,000SOC
Tobruk Refinery20,000Agoco
Sarir Refinery10,000Agoco

Notes:
1. Amounts in barrels per day.

Diversification
Pivot irrigation in Kufra, southeast Cyrenaica. Oil wealth has enabled Libya to pursue extravagant projects such as agriculture and the Great Manmade River in the Sahara Desert.
Modern buildings in Tripoli before the wars, 2009

In 2007, mining and hydrocarbon industries accounted for well over 95 percent of the Libyan economy. Diversification of the economy into manufacturing industries remain a long-term issue.

Although agriculture is the second-largest sector in the economy, Libya depends on imports in most foods. Climatic conditions and poor soils severely limit farm output, and domestic food production meets only about 25% of demand. Domestic conditions limit output, while higher incomes and a growing population have caused food consumption to rise. Because of low rainfall levels in Libya, agricultural projects such as the Kufra oasis rely on underground water sources. Libya's primary agricultural water source remains the Great Manmade River (GMMR), but significant resources are being invested in desalinization research to meet growing demand. Libyan agricultural projects and policies are overseen by a General Inspector; there is no Ministry of Agriculture, per se.[23]

Libya produced in 2018:

In addition to smaller productions of other agricultural products. [24]

Tourism

Labor market

Libya posted a 3.3% rate of population growth during 1960–2003. In 2003, 86% of the population was urban, compared to 45% in 1970. Although no reliable estimates are available, unemployment is reportedly acute: over 50% of the population under the age of 20. Moreover, despite the bias of labor market regulations favoring Libyan workers, the mismatch of the educational system with market demand has produced a large pool of expatriate workers, with typically better-suited education and higher productivity. However, because of shortages for manual labor, Libya has also attracted important numbers of less skilled immigrants. Expatriate workers represent an estimated fifth of the labor force.[25]

Although significant, the proportion of expatriate workers is still below oil producing countries in the Persian Gulf. Foreign workers mainly come from the Maghreb, Egypt, Turkey, India, the Philippines, Malaysia, Thailand, Vietnam, Poland, Chad, Sudan, and Bosnia and Herzegovina.[26][27] They tend to earn relatively high wages, taking either skilled or hard manual jobs. Census data for 2000 show the share of expatriates earning over LD 300 (US$230) per month was 20%, compared to 12% for Libyan nationals. A campaign encouraging conversion of qualified civil servants to entrepreneurs, in the face of public sector over employment and declining productivity, does not seem to be producing the desired results thus far.[18]

External trade and finance
Libyan export destinations in 2006.
A proportional representation of Libyan exports.

The Government is in the process of preparing a financial sector reform program. Recent legislation setting corporate governance standards for financial institutions makes progress towards better management and greater operational independence of public banks. However, Libyan public banks still lack management structures supported by skills in critical areas like credit, investment, risk management, and information and control systems.

The new banking law reinforces the independence of the Central Bank of Libya (CBL) and offers a legal framework for regulating banking activities, even if some provisions call for improvement. Despite progress brought by the new banking Law that specifies and limits its duties and responsibilities, the CBL remains the owner of the public banks, with the associated potential conflict of interest between ownership and regulation.

Financial sector reform has also progressed with partial interest rate liberalization. Interest rates have been liberalized on deposits, while a lending rate ceiling has been set above the discount rate. The Libyan Stock Exchange, established in 2007, is the first exchange of its kind in the country.

In 2011, Libya Oil Holdings had its €38m stake in Irish exploration firm Circle Oil frozen on foot of a European Union order that's been put in place to put pressure on the Gaddafi regime.[28]

Statistics

Household income or consumption by percentage share:
lowest 11%: NA%
highest 10%: NA%

Industrial production growth rate: 2.7% (2009)

Electricity - production: 24 billion kWh (2007 est)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 22.17 billion kWh (2007 est)

Electricity - exports: 104 million kWh (2007)

Electricity - imports: 77 million kWh (2007)

Agriculture - products: wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans, cattle, corn

International rankings
Organisation Survey Ranking
The Economist The World in 2005 - Worldwide quality-of-life index, 2005 70 out of 111
Energy Information Administration Greatest Oil Reserves by Country, 2006 9 out of 20
Reporters Without Borders Press Freedom Index (2007) 155 out of 169
Transparency International Corruption Perceptions Index 2007 131 out of 180
United Nations Development Programme Human Development Index 2005 58 out of 177

Notes
  1. "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
  3. "Population, total - Libya". data.worldbank.org. World Bank. Retrieved 15 November 2019.
  4. "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 15 November 2019.
  5. "Middle East and North Africa Economic Update, October 2019 : Reaching New Heights - Promoting Fair Competition in the Middle East and North Africa p. 5" (PDF). openknowledge.worldbank.org. World Bank. Retrieved 13 October 2019.
  6. "The World Factbook- Libya". Central Intelligence Agency. Retrieved 5 May 2018.
  7. "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 10 February 2019.
  8. "Human Development Indices and Indicators: 2018 Statistical update". hdr.undp.org. United Nations Development Programme. Retrieved 15 November 2019.
  9. "Labor force, total - Libya". data.worldbank.org. World Bank. Retrieved 27 November 2019.
  10. "Employment to population ratio, 15+, total (%) (national estimate) - Libya". data.worldbank.org. World Bank. Retrieved 27 November 2019.
  11. "Ease of Doing Business in Libya". Doingbusiness.org. Retrieved 29 November 2017.
  12. http://www.oecd.org/dac/stats/documentupload/LBY.JPG OECD Statistics
  13. "Libya". Organization of the Petroleum Exporting Countries. Retrieved 5 May 2018.
  14. USD 12,062 as of 2010 (IMF estimate); rank 48 worldwide, followed by Equatorial Guinea with USD 11,081 on rank 51.
  15. "GDP per capita, PPP (constant 2011 international $) | Data". data.worldbank.org. Retrieved 3 September 2018.
  16. "Report for Selected Countries and Subjects". www.imf.org. Retrieved 6 October 2018.
  17. Oil and Gas Journal, 2007
  18. World Bank 2006
  19. International Crude Oil Market Handbook
  20. EIA 2007
  21. "OMV's 1st Oil Find in Libya since Revolution". libya-businessnews.com/. Libya Business News. 22 October 2013. Retrieved 4 September 2015.
  22. EIA 2007 p.3
  23. Doing Business in LIBYA: A Country Commercial Guide for U.S. Companies, March, 2006
  24. Libya production in 2018, by FAO
  25. Although, in the absence of a labor force survey, estimates are surrounded by considerable uncertainty
  26. http://www.seenews.com/news/latestnews/bosnia_senergoinvestsees2007profitunchanging_signscontractsinlibya_-151444/ Archived 27 February 2008 at the Wayback Machine Bosnia's Energoinvest Sees 2007 Profit Flat, Signs Contracts in Libya, Algeria
  27. http://www.arabianbusiness.com/506991-bosnian-firm-clinches-52mn-libya-deal?ln=en Bosnian firm clinches $52mn Libya deal
  28. Libya Stake in Circle Oil Frozen

References

See also
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